Capitol Updates

CAPITOL UPDATE – August 10, 2020

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  • ALERT: “Grand Compromise” Scheme Advances

  • Vote Early and Engage in Political Action

  • This is It: Final Week of COVID-19-Delayed Legislative Session

ALERT: “Grand Compromise” Scheme Advances

On Tuesday, Aug. 11, Sen. Lou Ann Linehan’s “Grand Compromise”, including the refundable income tax scheme, is up for debate on Select File. This last minute proposal, encapsulated within AM3316 to LB1107, attempts to provide minimal property tax relief through a massive state income tax credit. In exchange for this minor property tax relief, the state will face a massive revenue shortfall in coming years!

LB1107 would create a refundable state income tax credit based upon a percentage of property taxes paid to schools. In year one, based upon a $200,000 residential property, the homeowner would receive a miniscule $90 refundable income tax credit. The cost to the state for the first year of this plan will be $150 million. The fifth year of the plan will require the state to fund $375 million in tax credits. It would establish a minimum requirement of $275 million for the Property Tax Credit Fund, and also after the fifth year provide an additional $150 million in corporate income tax credits.

However, this new proposal would significantly grow the revenue shortfall projected for the next biennium, essentially guaranteeing future cuts to education and other state priorities. The current shortfall projection for the next biennium is already set at $403 million. The new disaster embodied in LB1107 would add nearly $450 million in new spending over the next three fiscal years without raising additional revenue. That would bring the anticipated shortfall in the next biennium to more than $850 million. It will put a hard squeeze on budget priorities such as education and healthcare.

The revenue growth needed to pay for this scheme is clearly unrealistic. Revenue growth over the next three fiscal years would need to average 5.4 percent each year in order to avoid a shortfall, well above projected revenue growth of 1.48 projected. Fiscal year 2023 net receipts would need to be nearly $850 million more than fiscal year 2020 to cover the new spending required by this plan. Further, this required revenue growth is well above the historical adjusted average growth of 4.9 percent and even greater than the previous five-year average of 4.5 percent. The additional nearly $850 million in net receipts required also does not account for any money going to the state’s Cash Reserve Fund.

Passing tax cuts of this magnitude among so much economic uncertainty is simply irresponsible. The FY21 revenue forecast will likely have to be revised down, even as the state already faces a $400 million shortfall in the coming budget. Funding this disaster when the state doesn’t now have the resources needed to adequately fund schools, roads and other drivers of a strong economy is just plain wrong.

ACTION NEEDED! This “Grand Compromise” in LB1107 is on the agenda TOMORROW, Tuesday, Aug. 11. Please contact your state senator! Respectfully urge them to OPPOSE this costly income tax credit and corporate tax cut. The NSEA has very serious concerns about the financial sustainability of this proposal and its effect on students and public school funding in Nebraska. It’s important to call your senator today and voice your concern. Find your senator here.

 

Vote Early and Engage in Political Action

Nebraska's General Election is Tuesday, Nov. 3, 2020. Because of the continued impact of COVID-19, we encourage you to make sure you are registered to vote by October 16, and we urge you to make sure you request a mail-in ballot before the October 23 request deadline. Register to vote by clicking here.

There are several opportunities for you to make a difference for candidates who support children and public education:

  • You will be mailed an early-voting form soon but you can also get an application to vote by mail here.
  • Your help is needed to make phone calls or write postcards for our NSEA recommended candidates! Please contact NSEA Director of Political Action, Brian Mikkelsen at brian.mikkelsen@nsea.org or at (402) 432-3397 if you are willing to help in this important effort.

 

Final Week of COVID-19 Delayed Legislative Session

The Legislature will reconvene this Tuesday, Aug. 11, for the last 3 days of session. The agenda for Tuesday will likely be what the legislature follows through the end of session, with the potential addition of motions and more final reading. Last week, the Governor signed bills including the state budget bills with no line item vetoes.

The following is a list of priority bills that the NSEA is actively supporting or opposing. While there are other bills on which the NSEA has taken a position, this list includes those that will most directly affect our public schools, students and NSEA members. The full list of priority bills can be found online here.

OPPOSE:

LB1106     (Revenue) Eliminate obsolete sales tax provisions – Failed on General File

LB1107     (Scheer) Change property tax provisions relating to valuations – on Select File

LB1202     (Linehan) Adopt the Opportunity Scholarships Act and provide for tax credits – in Committee

LB1203     (Linehan) Change provisions relating to an income tax deduction for dividends received from certain corporations – in Committee

LR300CA (Erdman) Constitutional amendment to prohibit all forms of taxation other than consumption tax – in Committee

SUPPORT:

LB147       (Groene) Change the Student Discipline Act to provide for use by a teacher or administrator of necessary physical contact and provide procedures for removal from a class in response to behavior – Failed on General File

LB751       (Blood) Provide for a mental health exception to compulsory education requirements – presented to Governor for approval

LB848       (Pansing Brooks) Change Columbus Day to Indigenous People's Day – on Final Reading

LB920       (Groene) Change provisions for the distribution of lottery funds used for education, transfer powers and duties, and create new funds – on Select File; not scheduled for debate

LB965       (McDonnell) Establish a language assessment program for children who are deaf or hard of hearing – on Final Reading

LB992       (Friesen) Adopt the Broadband Internet Service Infrastructure Act and provide for certain broadband and Internet-related services – on Select File

LB996       (Brandt) Create the Broadband Data Improvement Program – approved by Governor

LB1054     (Kolterman) Define the required beginning date and change deferment of payment provisions under certain retirement plans – approved by Governor

LB1061     (Crawford) Change provisions relating to alternative response to reports of child abuse or neglect – approved by Governor

LB1073     (DeBoer) Create the School Financing Review Commission, add basic funding aid, and change adjusted valuations, the local effort rate, and certification dates – in Committee

LB1080     (Lathrop) Require school policies that prohibit sexual conduct with students and former students – presented to Governor for approval

LB1124     (Howard) Adopt the Opioid Prevention and Treatment Act – presented to Governor for approval

LB1131     (Groene) Change provisions relating to education – on Select File; not scheduled for debate

LB1140     (HHS) Provide requirements for youth rehabilitation and treatment centers – presented to Governor for approval

LB1144     (HHS) Change provisions affecting the Public Counsel and the Inspector General of Nebraska Child Welfare – presented to Governor for approval

LB1148     (Vargas) Change provisions relating to the Office of Juvenile Services and the placement of juveniles at youth rehabilitation and treatment centers – presented to Governor for approval

LB1166     (Brewer) Change school district membership requirements as prescribed – presented to Governor for approval

LB1186     (Hilgers) Require salary to be paid to injured school employees as prescribed – presented to Governor for approval

LB1188     (Howard) Provide duties for the Office of Juvenile Services relating to education and change the definition of interim program school – presented to Governor for approval